Always dumping on the little guy. Frederick C. Lee Jr. isn't Chuck Prince you know. He's just an honest American trying to make a buck the same way, well not exactly the same way, everybody else is.
But I think that the larger question(s) are two-fold.
First of all, I continue to be struck by the fact that the shit hit the fan when interest rates were high (in comparison with the Greenspan lows). Most of the Frederick C. Lee, Jr. fraudulent stuff was written very recently, no?
Second, the Fed appears to have indicated in Plosser's speech that, if you make risky loans that don't work, you take the bath, that the Fed won't bail you out. Sounds like bad news for Frederick C. Lee...unless he's pocketed the fees and sold the loans already.
But I think we have to do a little Sherlock Holmes here, eliminate some impossible, if you will.
Let's look at when and where Plosser delivered his speech.
When? The day after the dollar keeled over dead in response to crappy employment numbers. The dollar keeled over dead.
Where? Hawaii. The part of the United States closest to China and Japan, who, as it happens, happen to possess an enormous number of...the envelope please...dollars.
Hmmmmmmm. Could it be that the Fed will protect the dollar? Could it be that the Fed sees the collapse of the dollar as the worst of bad outcomes?
I would say yes.
I would offer a big "Thank you," to Frederick C. Lee, Jr. for his help in getting us here.
If the public really knew how much is spent on regulators salaries, benefits, travel, etc. they would be appalled at how little protection they recieve in return for their hard earned outlays. I cannot locate any current reference about what the host of regulators cost the public. It is well hidden from public view and when the public does find some portion of it they are highly unlikely to get the whole real truth. American rape never felt so bad as now. We my friends live in very hard times and sadly we do not even know it.
Frederick C. Lee Jr. isn't your run of the mill slimeball mortgage broker. He runs a housing related Ponzi scheme that preys on African Americans in the DC area - one of Michelle's earlier columns exposed that particular scheme. So in context, referring to Mr. Lee in her column effectively shows how Net-branching facilitated some of the real nasty stuff out there. Agree with Tanta that her stuff is generally very good.
Yes, this is a good example of how Singletary follows up on reports. She's doing a better job of connecting the dots, sometimes, than the "business reporters" do, and she's "just" an advice columnist.
arbogast, just to clarify, Lee doesn't "sell" loans. He doesn't actually make loans: he's just a broker (although he denies even that).
Notice that the loan referenced in the part I quoted lists the mortgage broker as "North American Real Estate Services." There was a time when HUD enforced regulations regarding the separation of real estate brokering and mortgage brokering. There is, obviously, a huge conflict of interest when you have a party profiting from the RE transaction and the mortgage transaction.
It's very much like those builder-owned mortgage companies: that's a case of the property seller approving the purchase-money loan. Does anyone wonder why there are problems with that?
We do have some kind of a regulatory framework for weeding this stuff out, but we have lacked enforcement. We also need to strengthen the regulations regarding identity of interest and illegal kickbacks. The builder industry used to be a powerful lobby who prevented that. I tend to think we should kick while they're down, so to speak, and get Congress interested in extending RESPA to go after these mutant hybrids of RE and mortgage.
I have never read Michelle Singletary's column. Now I will.
I was always tempted, speaking of columnists, to think that Bernanke and Krugman were closer than it appeared on the surface. Admittedly, Bernanke had to breath the fetid halitosis pouring from the Bush respiratory system while pretending not to choke, while Krugman was tilting at windmills on the op-ed page, but I just kind of hoped that, well, Bernanke wouldn't turn out to be the grotesque master of deceit that his predecessor was.
The Plosser speech has given me a lot of hope. The question is: can Bernanke, Plosser et al keep the losses South of the highway in East Hampton, so to speak. My prayers are with them.
"I tend to think we should kick while they're down, so to speak, and get Congress interested in extending RESPA to go after these mutant hybrids of RE and mortgage."
"The builder industry used to be a powerful lobby'
Tanta what congress does will probably go to the highest bidder in the lobby pool. As far as I can tell our government is bought and payed for by the special interest groups.
That's pretty extreme. The guy who I know that is doing something kinda similar only works with licensed brokers who aren't fha approved ... world of difference between what these scamsters are doing.
separation of real estate brokering and mortgage brokering. There is, obviously, a huge conflict of interest when you have a party profiting from the RE transaction and the mortgage transaction.
"Since the early 1970s, the commercial paper market has matured considerably. Commercial paper is now one of the more, if not the most, important instruments in the U.S. money market, thanks in large part to rating systems and backup lines of credit. As a result, the market is well-equipped to deal with small- to moderate-sized defaults.
Still, because no Penn Central-sized crisis has occurred in the past 27 years, the market remains essentially untested. Although the insurance that banks provide against rollover risk reduces the probability that a severe liquidity crunch could occur, the insurance also, however, transfers the liquidity risk from commercial paper issuers to the banking system. This guarantees that any potential liquidity crisis would be much more severe. Its this risk of a systemic shockwave that makes it necessary for the Fed to keep an eye on the commercial paper market as it heads toward the $1 trillion mark."
have times changed, the above was taken from the fed reserve bank of st. louis (test for the fed passage)-
More government spending means added lobbyists. About 30,000 people are registered lobbyists, twice as many as six years ago, as companies such as Wal-Mart Stores Inc. have cranked up efforts to influence government decisions, according to Washington-based PoliticalMoneyLine, a company that tracks such registrations.
Forget those swanky Connecticut addresses, lakeside Chicago suburbs and Silicon Valley millionaire enclaves. Loudoun and the next two wealthiest U.S. counties lie just outside Washington -- the traditional home of government workers -- and have median household incomes rising to almost $100,000, the latest Census Bureau figures show.
Even as the local housing market cools, the metropolitan area surrounding the U.S. capital has profited from surging government contract work to companies such as Telos, as well as lucrative lobbying fees, spurred by a record $2.65 trillion in spending by the Bush administration and Congress.
As someone who has worked for a mortgage broker and currently a mortgage lender, it has been almost impossible to not look into the Net Branch operation.
After researching it, I actually found it disadvantageous commission wise. They
may offer 100% commission, but they nail you with hidden fees that knock you down to the 50-60% gross commission level, if that.
Then you have crappy processing and everything that comes snowballs from that.
"The Federal Reserve took four steps to address the Penn Central crisis. First, it announced that it would extend funds, in the form of discount loans, to member banks that were willing to lend to customers with maturing commercial paper. Second, it suspended Regulation Q ceilings on large-denomination certificates of deposit, thereby enabling banks to bid for funds to make commercial paper related loans.9 Third, it stepped up its open market purchases of securities, which is the standard monetary policy tool to increase the amount of funds available to the banking system for lending. Finally, then Fed Chairman Arthur Burns announced that the Federal Reserve would directly or indirectly lend to firms that were unable to retire commercial paper. The first three steps thwarted the crisis, making the fourth step unnecessary."
Foreign countries buy our dollars to keep their currency cheap because we buy their stuff. If that is true the only way to support the dollar is for us to cut rates flood the system with money so we have more money to buy their stuff. At some point it ends when their stuff costs to much for them to buy their own stuff.
Singletary is mildly misleading because she fails to mention federal preemption of licensing laws, which exempts national banks and federally chartered thrifts. Otherwise not a terrible article.
In most states, the "investigation process" for mortgage broker and banker license applicants is a joke. The real bulwark against bad actors is the requirement of a (sometimes hefty) surety bond. Otherwise, the licensing offices are generally simply a revenue source for the state coffers. Pay the fee, fill in the blanks and "presto," the license appears in the mail. Someone who can't be bothered with even that minimal level of legal compliance is guaranteed to be fly-by-night.
Surprise, surprise, surprise! It is not the greedy homeowners and borrowers who created this mess?
Looks like there is plenty of blame to go around, not the least of which is the lack of regulation. If the fox gets to guard the hen house what ever can we expect?
I am waiting for the notion of personal responsibility to work its way up to corporate and governmental responsibility.
I think that is way to restore a sound economy, government and civil society.
Picking lawyer from failed lender for a key state post shocks across party lines
Joe Waltuch, the new head of the Nevada Mortgage Lending Division, defended the subprime mortgage industry and downplayed the foreclosure crisis in his first interview.
Although he acknowledged a problem, he said, "You're missing the positive side of all this."
Subprime loans - high interest loans given to people with spotty credit histories - represent just 15 percent of the market, he said. Only 1.5 percent of all mortgages, he said, will end up in foreclosure: "Everybody seems to think we need to protect the 1,500 at the expense of the 98,500 good loans."
It should come as no surprise, though, that Waltuch would defend the subprime lending industry.
He spent seven years as an in-house lawyer for a large subprime lender, with his last position as vice president and senior counsel for regulatory and legislative affairs at New Century Financial Corp., an Irvine, Calif., based subprime lender, once the second largest in the country but now defunct and the target of a criminal investigation.
His appointment, made by Mendy Elliott, who is Gov. Jim Gibbons' director of the Business and Industry Department, has been widely panned by Republicans and Democrats alike.
As I understand it, they sell bonds in their currency to buy dollars and then buy US securities which are generally governments and GSEs but branching out to equities.
Thus the dollar is supported and the ability of the US govt to finance deficients is enhanced.
lostingotham, good point. Last time I looked, a lot of states who had surety requirements had a minimum of $50,000. That, at the time at least, was the minimum net worth requirement for a broker to receive approval from HUD to take FHA applications. It's not a huge barrier to entry, so as you note, anyone who can't meet it is not much in the way of one of those sacred "small businesses" who need "regulatory relief."
I have seen dozens of broker approval guidelines of conventional wholesale lenders where the minimum net worth requirement is $25,000.
Undocumented workers are just another face of out-sourcing.
Two years in a row my neighbor planted watermelons. Two years in a row all the hot field work was done by latinos. No idea if they were legal or undocumented. OTOH, none of the people driving the tractors were latino.
Side note: a friend of mine sells jewelry at the flea market (decent stuff, but mostly silver). The latinos are her best customers for heavy silver chains.
Anyone up for discussing undocumented workers today?
Tanta | 09.09.07 - 10:33 am |
Absolutely. Just so long as everyone agrees to keep the terms straight. If you want to talk about illegal immigrant employment in the US then call it that. If you want to talk about unlicensed contractors then that's a different subject, a subject that involves competence vice certification. And seeing as Massachusetts requires 5x as much education for hairdressers as for real estate agents perhaps the latter is a form of undocumented work as well.
That will happen either way, just some ways are slower than others. I am not convinced they buy our paper with their paper because the ink on our paper is more valuable than the ink on their paper
countries like China print yuan like crazy to buy up the dollars we've printed up thru MEW that we've flooded China with in buying up goods. this keeps the yuan pegged below the dollar. then the gov't "sterilizes" part of those new yuan (to try and prevent massive inflation which they've only partially accomplished) by selling bonds to their ppl. now to pay the interest on those bonds as well as keep UST's low, they come over here and buy our bonds. this whole process is apparently slowing down b/c of all our recent problems with reduced MEW, falling dollar, and Wall St. crooksterisms.
The transactions goes something like this. Manufacturer gets $, deposits them in local bank as yuan, China govt sells bonds to soak up the yuan and then buys something with the $s it swapped for the yuan.
So, of the $640mm daily trade gap, which finds it's way to the banks, are converted into yuan for the benefit of the depositor.
Any balance above and beyond that is'nt convereted into yuan, is sold back to the us as dollar denominated debt.
Is there a suggestion that they are overprinting yuan, just to buy more dollar debt?
If we are going to keep terms straight go the whole hog - ALIEN is the term that the USCIS (nee INS) ( http://www.uscis.gov) uses for the "OTHER" at least as often as immigrant - and I don't see undocumented worker cropping up too often either.
And it describes America's, albeit schizoid, relationship with the rest of the world very well.
I think the minimum net worth requirement gets up to $200k in places, but the way they get around it is to have a money guy who provides the net worth (in return for way above market rate of return) and otherwise has nothing to do with the business.
"I tend to think that most jobs that involve, basically, dodging the law, will be like that.
Anyone up for discussing undocumented workers today?"
This gets to the heart of why Bush's guest worker program didn't get any support. It doesn't satisfy the nativist by running the illegals out of the country. And it doesn't satisfy those who profit from undocumented workers since as guest workers they would have rights and the ability to seek enforcement of those rights.
We'll see resistance to stopping the net-branching since they were profit centers for the broker vice operating legitimately.
One of the soberest comments I heard during the bubble was from an undocumented alien.
She and her family had bought a house. I congratulated her on being a "homeowner". She laughed sort of incredulously and disagreed with the word, saying: "The bank owns the house."
That was 2002. They are just another family of "illegals," still making mortgage payments on time.
vader said "As I understand it, they sell bonds in their currency to buy dollars and then buy US securities which are generally governments and GSEs but branching out to equities."
what ur saying is slightly different and doesn't involve printing NEW yuan which wouldn't be inflationary. the sequence is US buyers go to the banking system to exchange dollars for old yuan to pay to the chinese manufacturers. this drives up demand for yuan which would increase its value in relation to the dollar. to counteract this, the chinese CB prints NEW yuan to sop up the dollars in the banking system and drive down the value of the yuan. THEN they issue bonds to sterilize all the new yuan they've just issued to try and limit inflation.
If that is true the only way to support the dollar is for us to cut rates flood the system with money so we have more money to buy their stuff. At some point it ends when their stuff costs to much for them to buy their own stuff.
Hahaha... yeah, right. The reverse would be true. If we flood the system with money, pretty soon it ends when our stuff costs too much for us to buy it (i.e., hyperinflation).
TJ When are the existing bonds that foreign countries have worth more? When we cut rates or raise rates?
Great question.
Assuming a stable dollar, the value of the bonds would vary inversely with interest rates.
HOWEVER, since the dollar is diving, any rate cut is offset by conversion losses. It's essentially the same as higher than expected inflation on long bonds held domestically.
OTOH, should the fed raise rates, the dollar will hold but the bond value will drop. Given the weakening economy, the dollar won't hold without continued rate increases.
Heads you lose, tail you lose even more. Not a time to be holding US bonds, IMO.
I've followed Michelle Singletary for many years. Her column is intelligent. Much better than WSJ's Opdike, which purports to be of the same genre but I think is a whole lot of fluff.
idoc - read the part in your link about 'sterilized intervention'... that is EXACTLY what the Chinese are doing via PBoC & SAFE.
It need not result in a lot of Chinese money printing if the sterilization is close to 100% - it isn't but according to what I've read over at Setser's place they done a pretty good job sterilizing. Considering the growth in China, their price inflation has been moderate - money supply growth in chexk.
uh, i think thats changing quickly. inflation in China is picking up substantially esp. the last few months. pork prices have risen dramatically. we are starting to pay higher prices for their goods which will put even more pressure on the indebted.
pork prices increased dramatically due to a disease the porks had. it's not a long term upward pressure like oil prices. it's not inflationary.
as china keeps on adding more trade 'partners' cost of their goods will increase for us, even more if the dollar keeps on going down.
their labor costs are increasing due to the kick in of the 1 child policy (they are beginning to enter the labor force). so my guess is the anti-inflationary effect of trading with china will not be as strong.
Tanta,
Always dumping on the little guy. Frederick C. Lee Jr. isn't Chuck Prince you know. He's just an honest American trying to make a buck the same way, well not exactly the same way, everybody else is.
But I think that the larger question(s) are two-fold.
First of all, I continue to be struck by the fact that the shit hit the fan when interest rates were high (in comparison with the Greenspan lows). Most of the Frederick C. Lee, Jr. fraudulent stuff was written very recently, no?
Second, the Fed appears to have indicated in Plosser's speech that, if you make risky loans that don't work, you take the bath, that the Fed won't bail you out. Sounds like bad news for Frederick C. Lee...unless he's pocketed the fees and sold the loans already.
But I think we have to do a little Sherlock Holmes here, eliminate some impossible, if you will.
Let's look at when and where Plosser delivered his speech.
When? The day after the dollar keeled over dead in response to crappy employment numbers. The dollar keeled over dead.
Where? Hawaii. The part of the United States closest to China and Japan, who, as it happens, happen to possess an enormous number of...the envelope please...dollars.
Hmmmmmmm. Could it be that the Fed will protect the dollar? Could it be that the Fed sees the collapse of the dollar as the worst of bad outcomes?
I would say yes.
I would offer a big "Thank you," to Frederick C. Lee, Jr. for his help in getting us here.
If the public really knew how much is spent on regulators salaries, benefits, travel, etc. they would be appalled at how little protection they recieve in return for their hard earned outlays. I cannot locate any current reference about what the host of regulators cost the public. It is well hidden from public view and when the public does find some portion of it they are highly unlikely to get the whole real truth. American rape never felt so bad as now. We my friends live in very hard times and sadly we do not even know it.
Frederick C. Lee Jr. isn't your run of the mill slimeball mortgage broker. He runs a housing related Ponzi scheme that preys on African Americans in the DC area - one of Michelle's earlier columns exposed that particular scheme. So in context, referring to Mr. Lee in her column effectively shows how Net-branching facilitated some of the real nasty stuff out there. Agree with Tanta that her stuff is generally very good.
-Jaso
Yes, this is a good example of how Singletary follows up on reports. She's doing a better job of connecting the dots, sometimes, than the "business reporters" do, and she's "just" an advice columnist.
arbogast, just to clarify, Lee doesn't "sell" loans. He doesn't actually make loans: he's just a broker (although he denies even that).
Notice that the loan referenced in the part I quoted lists the mortgage broker as "North American Real Estate Services." There was a time when HUD enforced regulations regarding the separation of real estate brokering and mortgage brokering. There is, obviously, a huge conflict of interest when you have a party profiting from the RE transaction and the mortgage transaction.
It's very much like those builder-owned mortgage companies: that's a case of the property seller approving the purchase-money loan. Does anyone wonder why there are problems with that?
We do have some kind of a regulatory framework for weeding this stuff out, but we have lacked enforcement. We also need to strengthen the regulations regarding identity of interest and illegal kickbacks. The builder industry used to be a powerful lobby who prevented that. I tend to think we should kick while they're down, so to speak, and get Congress interested in extending RESPA to go after these mutant hybrids of RE and mortgage.
Thanks for the clarification.
I have never read Michelle Singletary's column. Now I will.
I was always tempted, speaking of columnists, to think that Bernanke and Krugman were closer than it appeared on the surface. Admittedly, Bernanke had to breath the fetid halitosis pouring from the Bush respiratory system while pretending not to choke, while Krugman was tilting at windmills on the op-ed page, but I just kind of hoped that, well, Bernanke wouldn't turn out to be the grotesque master of deceit that his predecessor was.
The Plosser speech has given me a lot of hope. The question is: can Bernanke, Plosser et al keep the losses South of the highway in East Hampton, so to speak. My prayers are with them.
"I tend to think we should kick while they're down, so to speak, and get Congress interested in extending RESPA to go after these mutant hybrids of RE and mortgage."
"The builder industry used to be a powerful lobby'
Tanta what congress does will probably go to the highest bidder in the lobby pool. As far as I can tell our government is bought and payed for by the special interest groups.
That's pretty extreme. The guy who I know that is doing something kinda similar only works with licensed brokers who aren't fha approved ... world of difference between what these scamsters are doing.
cp causes trouble for local government-
Local News | County could lose millions because of credit downgrade | Seattle Times Newspaper
separation of real estate brokering and mortgage brokering. There is, obviously, a huge conflict of interest when you have a party profiting from the RE transaction and the mortgage transaction.
Where have i seen this before???
Gm/gmac
"Since the early 1970s, the commercial paper market has matured considerably. Commercial paper is now one of the more, if not the most, important instruments in the U.S. money market, thanks in large part to rating systems and backup lines of credit. As a result, the market is well-equipped to deal with small- to moderate-sized defaults.
Still, because no Penn Central-sized crisis has occurred in the past 27 years, the market remains essentially untested. Although the insurance that banks provide against rollover risk reduces the probability that a severe liquidity crunch could occur, the insurance also, however, transfers the liquidity risk from commercial paper issuers to the banking system. This guarantees that any potential liquidity crisis would be much more severe. Its this risk of a systemic shockwave that makes it necessary for the Fed to keep an eye on the commercial paper market as it heads toward the $1 trillion mark."
have times changed, the above was taken from the fed reserve bank of st. louis (test for the fed passage)-
St. Louis Fed | Page Not Found
30,000 Lobbyists
More government spending means added lobbyists. About 30,000 people are registered lobbyists, twice as many as six years ago, as companies such as Wal-Mart Stores Inc. have cranked up efforts to influence government decisions, according to Washington-based PoliticalMoneyLine, a company that tracks such registrations.
Forget those swanky Connecticut addresses, lakeside Chicago suburbs and Silicon Valley millionaire enclaves. Loudoun and the next two wealthiest U.S. counties lie just outside Washington -- the traditional home of government workers -- and have median household incomes rising to almost $100,000, the latest Census Bureau figures show.
Even as the local housing market cools, the metropolitan area surrounding the U.S. capital has profited from surging government contract work to companies such as Telos, as well as lucrative lobbying fees, spurred by a record $2.65 trillion in spending by the Bush administration and Congress.
Washington Suburbs Lure Federal Work to Top New York's Wealth - Bloomberg.com
What's that smell?
As someone who has worked for a mortgage broker and currently a mortgage lender, it has been almost impossible to not look into the Net Branch operation.
After researching it, I actually found it disadvantageous commission wise. They
may offer 100% commission, but they nail you with hidden fees that knock you down to the 50-60% gross commission level, if that.
Then you have crappy processing and everything that comes snowballs from that.
Just imagine when it comes time to get paid?
actually found it disadvantageous commission wise.
I tend to think that most jobs that involve, basically, dodging the law, will be like that.
Anyone up for discussing undocumented workers today?
also from the fed st. louis paper-
"The Federal Reserve took four steps to address the Penn Central crisis. First, it announced that it would extend funds, in the form of discount loans, to member banks that were willing to lend to customers with maturing commercial paper. Second, it suspended Regulation Q ceilings on large-denomination certificates of deposit, thereby enabling banks to bid for funds to make commercial paper related loans.9 Third, it stepped up its open market purchases of securities, which is the standard monetary policy tool to increase the amount of funds available to the banking system for lending. Finally, then Fed Chairman Arthur Burns announced that the Federal Reserve would directly or indirectly lend to firms that were unable to retire commercial paper. The first three steps thwarted the crisis, making the fourth step unnecessary."
englund, does a 100% about-face-
The Fed: A Whole New Ballgame
Well, I would only say that the whole thing with "undocumented" workers is that they are a bargain for the employer.
Sort of like Chinese workers, who are also undocumented.
Undocumented workers are just another face of out-sourcing.
The people who are all in a tither about undocumented "illegal" aliens should take a visit to The Hundred Acre Wood and try to Think, Think, Think.
As long as the country is run on the law of the jungle, these problems will exist.
And, please recall, slavery is built in to the Constitution. Oh, I admit there is an amendment, but tell that to George Bush and Trent Lott.
Foreign countries buy our dollars to keep their currency cheap because we buy their stuff. If that is true the only way to support the dollar is for us to cut rates flood the system with money so we have more money to buy their stuff. At some point it ends when their stuff costs to much for them to buy their own stuff.
tg,
How do you do that without having a loaf of bread cost $1,000,000?
Singletary is mildly misleading because she fails to mention federal preemption of licensing laws, which exempts national banks and federally chartered thrifts. Otherwise not a terrible article.
In most states, the "investigation process" for mortgage broker and banker license applicants is a joke. The real bulwark against bad actors is the requirement of a (sometimes hefty) surety bond. Otherwise, the licensing offices are generally simply a revenue source for the state coffers. Pay the fee, fill in the blanks and "presto," the license appears in the mail. Someone who can't be bothered with even that minimal level of legal compliance is guaranteed to be fly-by-night.
Anyone up for discussing undocumented workers today?
Tanta | 09.09.07 - 10:33 am |
ok, I'll bite.
How can i become one?
Surprise, surprise, surprise! It is not the greedy homeowners and borrowers who created this mess?
Looks like there is plenty of blame to go around, not the least of which is the lack of regulation. If the fox gets to guard the hen house what ever can we expect?
I am waiting for the notion of personal responsibility to work its way up to corporate and governmental responsibility.
I think that is way to restore a sound economy, government and civil society.
Foreign countries buy our dollars to keep their currency cheap because we buy their stuff
Don't they effectively sell our dollars to buy bonds, of some sort ?
Regulator defends subprime lending
Picking lawyer from failed lender for a key state post shocks across party lines
Joe Waltuch, the new head of the Nevada Mortgage Lending Division, defended the subprime mortgage industry and downplayed the foreclosure crisis in his first interview.
Although he acknowledged a problem, he said, "You're missing the positive side of all this."
Subprime loans - high interest loans given to people with spotty credit histories - represent just 15 percent of the market, he said. Only 1.5 percent of all mortgages, he said, will end up in foreclosure: "Everybody seems to think we need to protect the 1,500 at the expense of the 98,500 good loans."
It should come as no surprise, though, that Waltuch would defend the subprime lending industry.
He spent seven years as an in-house lawyer for a large subprime lender, with his last position as vice president and senior counsel for regulatory and legislative affairs at New Century Financial Corp., an Irvine, Calif., based subprime lender, once the second largest in the country but now defunct and the target of a criminal investigation.
His appointment, made by Mendy Elliott, who is Gov. Jim Gibbons' director of the Business and Industry Department, has been widely panned by Republicans and Democrats alike.
Page not found Las Vegas Sun 566667409.html
Your going to love this one Tanta.
confused
As I understand it, they sell bonds in their currency to buy dollars and then buy US securities which are generally governments and GSEs but branching out to equities.
Thus the dollar is supported and the ability of the US govt to finance deficients is enhanced.
Remember when the WaPo had James Glassman write a Sunday column? I valued his writing.
Go 'Skins Tanta!
lostingotham, good point. Last time I looked, a lot of states who had surety requirements had a minimum of $50,000. That, at the time at least, was the minimum net worth requirement for a broker to receive approval from HUD to take FHA applications. It's not a huge barrier to entry, so as you note, anyone who can't meet it is not much in the way of one of those sacred "small businesses" who need "regulatory relief."
I have seen dozens of broker approval guidelines of conventional wholesale lenders where the minimum net worth requirement is $25,000.
Undocumented workers are just another face of out-sourcing.
Two years in a row my neighbor planted watermelons. Two years in a row all the hot field work was done by latinos. No idea if they were legal or undocumented. OTOH, none of the people driving the tractors were latino.
Side note: a friend of mine sells jewelry at the flea market (decent stuff, but mostly silver). The latinos are her best customers for heavy silver chains.
Anyone up for discussing undocumented workers today?
Tanta | 09.09.07 - 10:33 am |
Absolutely. Just so long as everyone agrees to keep the terms straight. If you want to talk about illegal immigrant employment in the US then call it that. If you want to talk about unlicensed contractors then that's a different subject, a subject that involves competence vice certification. And seeing as Massachusetts requires 5x as much education for hairdressers as for real estate agents perhaps the latter is a form of undocumented work as well.
Arbo,
That will happen either way, just some ways are slower than others. I am not convinced they buy our paper with their paper because the ink on our paper is more valuable than the ink on their paper
confused, vader
countries like China print yuan like crazy to buy up the dollars we've printed up thru MEW that we've flooded China with in buying up goods. this keeps the yuan pegged below the dollar. then the gov't "sterilizes" part of those new yuan (to try and prevent massive inflation which they've only partially accomplished) by selling bonds to their ppl. now to pay the interest on those bonds as well as keep UST's low, they come over here and buy our bonds. this whole process is apparently slowing down b/c of all our recent problems with reduced MEW, falling dollar, and Wall St. crooksterisms.
Robert Cote,
Hairdressers are, after all, the most highly regarded professionals in Southie...and Southie runs Massachusetts.
I didn't know Tanta was local. I am puffed up with regional pride.
(One of the -presumably many- economists who reads Tanta for the insider industry perspective, and values her posts mightily.)
lama,
LoL! or in the vernacular; Wicked pissah! Too early for a packy run for more beah?
idoc
Yours is long version of what I said.
The transactions goes something like this. Manufacturer gets $, deposits them in local bank as yuan, China govt sells bonds to soak up the yuan and then buys something with the $s it swapped for the yuan.
FTD - Statistics - Country Data - U.S. Trade Balance with China
China trade gap
So, of the $640mm daily trade gap, which finds it's way to the banks, are converted into yuan for the benefit of the depositor.
Any balance above and beyond that is'nt convereted into yuan, is sold back to the us as dollar denominated debt.
Is there a suggestion that they are overprinting yuan, just to buy more dollar debt?
If we are going to keep terms straight go the whole hog - ALIEN is the term that the USCIS (nee INS) ( http://www.uscis.gov) uses for the "OTHER" at least as often as immigrant - and I don't see undocumented worker cropping up too often either.
And it describes America's, albeit schizoid, relationship with the rest of the world very well.
-K
I think the minimum net worth requirement gets up to $200k in places, but the way they get around it is to have a money guy who provides the net worth (in return for way above market rate of return) and otherwise has nothing to do with the business.
"I tend to think that most jobs that involve, basically, dodging the law, will be like that.
Anyone up for discussing undocumented workers today?"
This gets to the heart of why Bush's guest worker program didn't get any support. It doesn't satisfy the nativist by running the illegals out of the country. And it doesn't satisfy those who profit from undocumented workers since as guest workers they would have rights and the ability to seek enforcement of those rights.
We'll see resistance to stopping the net-branching since they were profit centers for the broker vice operating legitimately.
For many, there is no legal path to immigration.
The entirely predictable outcome: illegal immigration.
One of the soberest comments I heard during the bubble was from an undocumented alien.
She and her family had bought a house. I congratulated her on being a "homeowner". She laughed sort of incredulously and disagreed with the word, saying: "The bank owns the house."
That was 2002. They are just another family of "illegals," still making mortgage payments on time.
vader said "As I understand it, they sell bonds in their currency to buy dollars and then buy US securities which are generally governments and GSEs but branching out to equities."
what ur saying is slightly different and doesn't involve printing NEW yuan which wouldn't be inflationary. the sequence is US buyers go to the banking system to exchange dollars for old yuan to pay to the chinese manufacturers. this drives up demand for yuan which would increase its value in relation to the dollar. to counteract this, the chinese CB prints NEW yuan to sop up the dollars in the banking system and drive down the value of the yuan. THEN they issue bonds to sterilize all the new yuan they've just issued to try and limit inflation.
vader
Finance: Chapter 70-4: Foreign Exchange Interventions with Floating Exchange Rates
If that is true the only way to support the dollar is for us to cut rates flood the system with money so we have more money to buy their stuff. At some point it ends when their stuff costs to much for them to buy their own stuff.
Hahaha... yeah, right. The reverse would be true. If we flood the system with money, pretty soon it ends when our stuff costs too much for us to buy it (i.e., hyperinflation).
risk capital, are you in King County? Thanks for the link. I'm not happy about this, and wonder how much else KC taxpayers are going to get stuck for.
Found this ad over at Implode-O-Meter:
Need a Net Branch Home?
Your net branch parent going under? We'll get you on your feet today!
www.firsthouston.com
It's like whack-a-mole with these things.
TJ When are the existing bonds that foreign countries have worth more? When we cut rates or raise rates?
And the bond isn't even a net worth requirement, apparently: Commercial / Miscellaneous Rates For Surety Bonds
Scary to think of a "loan officer" who can't come up with fifty thousand dollars.
TJ When are the existing bonds that foreign countries have worth more? When we cut rates or raise rates?
Great question.
Assuming a stable dollar, the value of the bonds would vary inversely with interest rates.
HOWEVER, since the dollar is diving, any rate cut is offset by conversion losses. It's essentially the same as higher than expected inflation on long bonds held domestically.
OTOH, should the fed raise rates, the dollar will hold but the bond value will drop. Given the weakening economy, the dollar won't hold without continued rate increases.
Heads you lose, tail you lose even more. Not a time to be holding US bonds, IMO.
I've followed Michelle Singletary for many years. Her column is intelligent. Much better than WSJ's Opdike, which purports to be of the same genre but I think is a whole lot of fluff.
idoc - read the part in your link about 'sterilized intervention'... that is EXACTLY what the Chinese are doing via PBoC & SAFE.
It need not result in a lot of Chinese money printing if the sterilization is close to 100% - it isn't but according to what I've read over at Setser's place they done a pretty good job sterilizing. Considering the growth in China, their price inflation has been moderate - money supply growth in chexk.
dryfly,
What do you make of China's not buying Treasuries yet continuing to pick up Agencies?
dryfly
uh, i think thats changing quickly. inflation in China is picking up substantially esp. the last few months. pork prices have risen dramatically. we are starting to pay higher prices for their goods which will put even more pressure on the indebted.
pork prices increased dramatically due to a disease the porks had. it's not a long term upward pressure like oil prices. it's not inflationary.
as china keeps on adding more trade 'partners' cost of their goods will increase for us, even more if the dollar keeps on going down.
their labor costs are increasing due to the kick in of the 1 child policy (they are beginning to enter the labor force). so my guess is the anti-inflationary effect of trading with china will not be as strong.